Key employment law updates | January 2021

National Living Wage and National Minimum Wage increase

Following the recommendations made by the Low Pay Commission at the end of October, the Government has announced the National Living Wage ("NLW") and National Minimum Wage ("NMW") rates which will come into force from 1 April 2021.

As of 1 April 2021, the new rates will be:

• NLW will increase from £8.72 to £8.91 (for those aged 23 and over)
• NMW 21 to 22 year old rate will increase from £8.20 to £8.36
• NMW 18 to 20 year old rate will increase from £6.45 to £6.56
• NMW 16 to 17 year old rate will increase from £4.55 to £4.62
• NMW apprentice rate for those aged under 19 or in their first year of an apprenticeship will increase from £4.15 to £4.30

Non-compete and exclusivity clauses in employment contracts

The consultation on reform of post termination non-compete clauses in employment contracts will close on 26 February, with a variety of options up to and including a complete ban on non-compete clauses (which seems unlikely in our view) being considered. This is as a result of the Covid-19 pandemic as the Government is hoping to 'unleash innovation, create the conditions for new jobs and increase competition' with any reforms.

Also due to close on 26 February is a separate consultation on extending the ban on exclusivity clauses in employment contracts. This would prevent employers from restricting low-paid employees (under £120 per week) from working elsewhere. Currently the ban only applies to zero hours contracts.

The Government is revisiting the measure again as it is mindful that low earners have been particularly adversely affected by the COVID-19 pandemic, and many employers are currently unable to offer their employees sufficient hours for them to make ends meet.

Proposed increases to statutory payments

On the 8 December 2020, the Government published a policy paper outlining proposed increases to a number of statutory payments.

The following weekly rates are expected to apply from April 2021:

• Statutory sick pay will increase from £95.85 to £96.35
• Statutory maternity pay will increase from £151.20 to £151.97
• Statutory paternity pay will increase from £151.20 to £151.97  
• Statutory shared parental pay will increase from £151.20 to £151.97  
• Statutory adoption pay will increase from £151.20 to £151.97